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Archive for June, 2012

Businesses are not inherently academic, so why are degrees becoming the prerequisite skill?

Latest news suggests that without more degree level education based skills, the UK will experience an exodus of jobs overseas to emerging economies. But when we already have students doing degrees just for the sake of doing them and a basic education system which sees school-leavers failing to possess even basic literacy and numeracy skills, should we really be thinking about pushing more through a university education as the immediate priority?

Like it or not, many young people are neither cut out nor ready for an academic pathway from or even during secondary education. Simply creating more courses to include a wider selection of students is hardly the answer and is fast leading to the existence of meaningless degrees, which won’t help business, and don’t help the students themselves who these days will have had to sell their soul to get it.

One of the greater injustices of recent political times is the idea propagated by New Labour during the 1997-2010 period of Government that everyone could be the same and do the same things. Such socialist ideology permeates itself by changing – or rather levelling systems throughout society to treat everyone the same under the ideal that to do so is providing ‘equal opportunities’.  However, as we are all different – and often in ways that cannot be seen with the naked eye – this method is not only obtuse in the extreme, it has contributed to the creation of a society where younger generations are becoming lazy and without ambition. When you add to this the burden of taxation which is placed upon higher wage earners for daring to do well and the resentment they experience if they do so, neither do you leave in place any real motivation to be any different or encourage the social mobility that the same idealist meddlers suggest to be a milestone of progress.

The good behind many ideas, policies and concepts is often lost when change is enacted simply for the sake of change and this is no less so within education as elsewhere. Whilst the technology age has altered the requirements for skills throughout the industries, the historic format of leaving school at 14 and becoming ‘apprenticed’ was a much better way to foster learning in those who were more ‘hands than head’ at the time, and could as such provide lessons in forming the basis of a very radical and effective way to change the way that we develop our National skills base for business and industry.

Why not:

  • Remove the burdens of red tape which govern the working environment for younger people.
  • Develop an effective subsidy allocation and training scheme to assist participant businesses to replace unused school places, ‘young to work’ schemes and unemployment benefits.
  • Give business a cost-effective motivation to support vocational or ‘on-the-job’ training for 14-21 year olds who in that time, may well have attained the equivalent of academic training in parallel skills and real-world experience, which may in fact have far more use to companies than ‘green’ graduates who refuse to stuff envelopes because they have a degree.

Business can only get the best from employees if they have been nurtured within a system which allows and encourages them to be their best – in whatever way that may be. Even the suggestion that you must have a degree level education to make an effective contribution is not only short sighted; it fails to recognise that a true acceptance of diversity goes way beyond embracing race, impairment, sexuality, location or social group and that each pathway to learning can be highly beneficial to society with real opportunities put in place to appreciate it.

Peer to Peer unsecured business lending for SME’s is on the rise. But are you surprised?

The internet culture of openness and sharing is promoting massive changes for businesses of all sizes, as the continuing upsurge in businesses aiming to develop both our social media knowledge and use will easily confirm. But the gaps which have been bridged in one way by new basic communication mediums are now developing into fully fledged by-passes in others and not least of all through the proliferation of peer-to-peer lending sites such as Funding Circle.

When taking my first real plunge as a start-up with a solid distribution contract 8 years ago, I would have leapt at the chance to obtain £250K unsecured lending from a range of private investors. Instead, I had no option but to give a charge against the equity on my home to a high street retail bank. I’m sure that many who have driven the development of an SME whilst being the sole bread-winner at home will relate to the experience of having your partner crying as you call in at your solicitors to complete the paperwork.

But business is inherently risky, and that’s why not everyone does it – or receives the benefits that come with it. Banks however, look very much like they have become ‘penny wise and pound foolish’ when it comes to business vs corporate lending and you won’t have to dig far in to the realms of the recent Banking Crisis and the current Eurozone debacle to see where the big money has been going.

In the past, decisions on lending were actually made by a branch manager at the local bank, who wouldn’t have to talk to a faceless lending ‘specialist’ on the phone or enter all the relevant data onto a network to see if your sweat-soaked business plans were credit worthy, because they took the time to know a client and could see where real risk would lie. I can honestly remember the reverence that the ‘bank manager’ was given when I was a child – not unlike that of a GP or a Dentist. And Oh… how the times have changed.

I would guess that I am far from being alone in having sat with a Business Relationship Manager to talk through the acorns of an idea to see if the will was there to provide funds, before taking a nod away with meto go and commit many further hours of work to creating a written business plan, to then have it quashed in moments when it travels further up the chain by someone or something which basically has nothing more in mind than having one’s cake and then eating it. Put bluntly, it looks very much like interest, security and surety are the 3 requirements of high street retail business banking to small and new business today, and any more than  2 such caveats are not only unrealistic, they are wholly unreasonable.

Not one moment too soon, peer-to-peer lending has arrived, giving entrepreneurs the opportunity to put great business ideas to open-minded lenders who are able to listen to the thought and actually experience the passion behind an idea, and then make an emotional evaluation of the weaknesses and strengths of that concept or perhaps just a plan for expansion, before deciding whether they want to make a similar leap of faith. Even the Government has been caught on-the-hoof with this growing concept pledging no less than £100 Million to support this type of borrowing.

The irony is that for those ‘peers’ choosing to lend and perhaps spread £100K in £5K chunks across 20 different projects, they are spreading their risk widely after making a proper evaluation of all the lending AND receiving a good level of interest too. Banks would perhaps do well to bear this in mind as they go chasing the sure-thing of that golden egg dropping into the basket which comes from a hen with a great set of teeth…

If your Business wasn’t started just to create jobs, why should you have to run it like you did?

Businesses are not established with the aim of creating jobs. Yet we hear and see an increasing amount of news about wages, employee benefits and employment Laws which would strongly suggest otherwise and leave many of us wondering exactly when the micromanaging hand of Government and European Legislation will actually be stopped in its tracks. SME’s in particular are burdened with rafts of Legislation which many owners are simply not able to afford to manage by hiring specialist management or consultancy input that would otherwise be unnecessary.

When you set up a small business on the back of a particular skills set which then begins to grow and requires staff, should a financially-strapped Government really be placing barriers in the way of entrepreneurial growth and survival by insisting that you understand and enact the many stages and steps that you have to chronologically take before you can remove a bad, perhaps livelihood-threatening employee?

I’m sure I was not alone in wondering if at last some sense were beginning to prevail following the announcement in March that the Government had began a Consultation on ‘No Fault Dismissals’ and that perhaps hard working business people and innovators would now be trusted not only to grow their enterprises, but to also look after the staff who ultimately look after them.

Like every situation in life, a workplace will have its share of good and not so good employees, but it is simply ridiculous to place the burden of proof upon an employer in order for them to expeditiously remove disruptive, troublesome and sometimes poisonous staff who can potentially destroy a business through their actions and continued presence. The bottom line is after all that it is only in extreme circumstances that any genuine SME employer realistically wants to have to take the trouble to remove any employee on an immediate and individual basis, unless they simply can’t afford to keep them anyway. Redundancy is and should always remain a different thing entirely.

At this point, the argument that simple staff under-performance would result in unfair summary dismissal as a result of changes is likely to be introduced. But for any of us who have employed and managed people within an SME setting where you don’t have the benefit of dedicated HR or Recruiter resources at your call, we know only too well how much time and expense it actually takes to recruit a replacement employee for any job and especially those roles which will be key to growth and continuance. It is hardly therefore likely that most of us would do anything other than make the maximum effort to bring staff up to the required standard if it is actually possible to do so.

It is sensible to accept that there will always be those employers who will abuse trust and operate in an unscrupulous manner towards their employees. Thankfully, I believe that they are now very few in number and with staff basically being the primary asset of any business, those leaders who treat them badly will soon reap the rewards of what they have sown without the interference of unnecessary legislation and the all-too-often misused threat of Employment Tribunals hanging over them.

Having seen all too many potentially great small businesses halted in their tracks, simply because the owner doesn’t want the problems associated with employing staff and also witnessed larger businesses brought to a standstill because of the self-serving militancy of charismatically influential individuals, it’s high time that Laws which have been created for the sake of having such laws were repealed and taken back to the point where most of us would accept they were actually doing some good.

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